Investors’ capital is increasingly flowing to a handful of high-performing sectors led by Fintech, Energy & Water, and Healthcare, which collectively captured over 70 percent of total investments.
Startups on the continent raised $1.42 billion across 243 deals in the first half of 2025, indicating a 78 percent increase from the same period last year, according to the ‘State of Tech in Africa H1 2025’ report by TechCabal Insights.
Fintech retained its dominance by attracting $638.8 million more than the next three sectors combined; the energy and water sector followed with $219.4 million, and healthcare pulled in $158.6 million during the period.
“H1 2025 saw a dramatic concentration of capital compared to H1 2024, with funding for Fintech growing 166 percent and Healthcare 209 percent,” Nima Yussuf, chief operations officer at Silverbacks Holdings, said.
“AI now underpins faster customer acquisition, operational automation, and enhanced risk management, accelerating paths to profitability. Founders who successfully blend strong growth with AI-powered efficiency are commanding higher valuations in today’s top funding rounds,” she stated.
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For fintech, investors continue to back digital payments, lending, and cross-border solutions, with stablecoin usage, AI-driven risk tools, and embedded finance drawing fresh interest.
The energy and Water sector funding reflects growing attention to sustainability and clean infrastructure, while healthcare funding was driven by the expansion of telemedicine and diagnostic platforms.
The report revealed that emerging sectors such as housing, services, and education & jobs also gained traction as housing recorded a 3,650 percent funding spike, buoyed by a landmark deal that pushed total investment in the space to $75 million.
Services also grew by 315 percent to $61.1 million, while Education & Jobs, though attracting fewer deals, saw total funding more than double to $42 million.
However, not all sectors shared in the rebound as Agriculture & Food and Logistics & Transport suffered significant drops, falling 62 percent and 48 percent respectively, as investors pulled back from low-margin, high-cost models.
With equity funding up 79 percent and debt financing growing 75 percent year-on-year, Africa’s investment climate is shifting from survival to strategic growth. If current momentum continues, 2025 could surpass last year’s total of $2.24 billion, signaling renewed investor confidence in Africa’s maturing tech ecosystem.
The report noted that Merger and acquisition activity in Africa’s tech ecosystem has shown consistent growth since 2019, signaling a maturing market where companies are actively joining forces.
“In the first half of 2025, a total of 29 M&A deals were recorded, the highest number for any H1 period on record,” it stated.
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